Groklaw: BayStar Being “Scrutinized” by the SEC

“‘The SEC is investigating 20 instances in which hedge funds may
have used insider information to profit from coming stock
offerings,’ the Wall St. Journal reports. And guess who is on the
list?

“BayStar Capital.

“Here’s what the Journal is reporting:

“‘The SEC is investigating whether hedge funds, tipped off to
Pipe deals by brokers looking for interested buyers, made bets
against the companies’ stocks before the deals were consummated and
disclosed publicly–through the legal practice of ‘shorting,’ or
selling borrowed shares in a bet that those companies’ stock prices
would decline…'”

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